EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507525
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Challenge Australian Dairy Pty Ltd applied for a TCO in respect of certain Cheese Extruders on 20 June 2005.
Instrument
TCO No 0507525 was made on 9 September 2005. It declares that those certain Cheese Extruders are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0507525 is taken to have come into force on 20 June 2005.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0507525, enacted in 2005, is a specific measure under the Customs Act 1901, designed to address the need for tariff concessions for certain goods not produced domestically. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. This particular instrument was introduced to provide relief to Australian Dairy Pty Ltd, which applied for a concession on Cheese Extruders, aligning with the Act’s objective of facilitating trade by reducing duties on non-domestically produced goods, provided no substitutable goods are manufactured in Australia. The Parliament enacted this legislation to streamline trade processes and support specific industries by reducing their customs obligations.
Scope and Application
The Tariff Concession Instrument No. 0507525 under the Customs Act 1901 applies to goods specified in the application for a Tariff Concession Order (TCO), which in this case were certain Cheese Extruders applied for by Australian Dairy Pty Ltd. The Act mandates that the Chief Executive Officer of Customs must assess whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia, before making a decision on the TCO. This legislation is applicable across Australia as it falls under the Commonwealth jurisdiction. However, certain goods specified in section 269SJ of the Act are excluded from the TCO scheme. The application process requires the CEO to publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. The TCO itself does not retroactively affect the rights of any person, ensuring that no one is disadvantaged or incurs liabilities for actions prior to the TCO's effective date. The TCO No. 0507525, which came into force on 20 June 2005, alters the duty rate for the specified Cheese Extruders from the general rate of 5% to 0%, directly benefiting importers of these goods by potentially entitling them to a duty refund for imports made since the TCO's effective date.
Key Provisions
The main sections of this Tariff Concession Order (TCO) under the Customs Act 1901 (the Act) include sections 269C, 269P, and 269SJ, which outline the criteria for the making of a TCO and the types of goods that cannot be subject to a TCO. Section 269C stipulates that the Chief Executive Officer (CEO) of Customs must determine whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets these criteria, they must issue a written order, the TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. Section 269SJ, meanwhile, details the types of goods that cannot be subject to a TCO, thereby restricting the scope of concession eligibility.
The Act imposes specific obligations on both the CEO and applicants for TCOs. For the CEO, it is mandatory to assess whether an application meets the core criteria outlined in section 269C. This includes verifying that no substitutable goods were produced in Australia on the application date and ensuring that the goods do not fall under the restricted categories specified in section 269SJ. For applicants, the primary obligation is to submit a valid application that clearly outlines the goods in question and provides sufficient evidence to support the application’s eligibility for a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as stipulated in subsection 269K(1), although in this case, no submissions were received.
The Act does not explicitly list offences or penalties for breaches related to TCOs. However, general provisions under the Customs Act 1901 and related regulations may apply to any actions that contravene the terms of the TCO. For instance, if an entity fails to comply with the terms of the TCO, they could potentially face civil or criminal penalties under broader customs legislation. These could include fines and imprisonment, depending on the nature and severity of the breach. While the specific penalties are not detailed within this particular TCO, the overarching legal framework ensures that any misuse or non-compliance with the terms of a TCO could result in significant consequences.